How do exotic car rental firms make any money?
Discussion
So I've recently got quite 'into' instagram and over the last week or so have wasted far too much of my time browsing through photos on insta. It seems to a common theme of there being several car hire firms with a shed load of exotica. A few that particularly stick out:
PET - Platinum Executive Travel. A Birmingham based firm which has literally what appears to be an endless amount of cars. 6 Rolls Royce Phantoms, a Drophead Phantom a few Ghosts, Wraith, 3 Aventadaors including an SV, 2 Huracans, 2 G Wagons, 911 Turbo, R8, 458 and I think there's more. With the initial outlay of these, then the insurance, the maintenance, the logistics of transporting them around etc my man maths is struggling to establish how this turns a profit. Unless they charge like 10k for renting but then whose paying that much to rent them?
Then I came across an instagram page of 'horsepowerrentals' which frankly make the above fleet look tame. They have LaFerrari, Enzo, F40 and F50 for rent (as well the usual Lambos, Ferraris, McLarens) etc. I just can't fathom how they will ever turn a profit on those type of cars? Unless they're just using it to subsidize the cost. I imagine the insurance on a LaFerrari for rental purposes must be ridiculous.
Anyone in the business or in the know who can shed some information?
PET - Platinum Executive Travel. A Birmingham based firm which has literally what appears to be an endless amount of cars. 6 Rolls Royce Phantoms, a Drophead Phantom a few Ghosts, Wraith, 3 Aventadaors including an SV, 2 Huracans, 2 G Wagons, 911 Turbo, R8, 458 and I think there's more. With the initial outlay of these, then the insurance, the maintenance, the logistics of transporting them around etc my man maths is struggling to establish how this turns a profit. Unless they charge like 10k for renting but then whose paying that much to rent them?
Then I came across an instagram page of 'horsepowerrentals' which frankly make the above fleet look tame. They have LaFerrari, Enzo, F40 and F50 for rent (as well the usual Lambos, Ferraris, McLarens) etc. I just can't fathom how they will ever turn a profit on those type of cars? Unless they're just using it to subsidize the cost. I imagine the insurance on a LaFerrari for rental purposes must be ridiculous.
Anyone in the business or in the know who can shed some information?
dudleybloke said:
That thought did indeed cross my mind but isn't this is just a ludicrously blatant and risky way of doing it? There's far more risk averse methods e.g dodgy chicken shop / phone repair shops which don't attract attention from joe public and about a million people on instagram like a fleet of ferraris does lol. Although such people probably have quite large egos so it wouldn't surprise me.TopGear7 said:
So I've recently got quite 'into' instagram and over the last week or so have wasted far too much of my time browsing through photos on insta. It seems to a common theme of there being several car hire firms with a shed load of exotica. A few that particularly stick out:
PET - Platinum Executive Travel. A Birmingham based firm which has literally what appears to be an endless amount of cars. 6 Rolls Royce Phantoms, a Drophead Phantom a few Ghosts, Wraith, 3 Aventadaors including an SV, 2 Huracans, 2 G Wagons, 911 Turbo, R8, 458 and I think there's more. With the initial outlay of these, then the insurance, the maintenance, the logistics of transporting them around etc my man maths is struggling to establish how this turns a profit. Unless they charge like 10k for renting but then whose paying that much to rent them?
Anyone in the business or in the know who can shed some information?
http://www.birminghammail.co.uk/news/midlands-news/video-180m-money-laundering-scam-6949219PET - Platinum Executive Travel. A Birmingham based firm which has literally what appears to be an endless amount of cars. 6 Rolls Royce Phantoms, a Drophead Phantom a few Ghosts, Wraith, 3 Aventadaors including an SV, 2 Huracans, 2 G Wagons, 911 Turbo, R8, 458 and I think there's more. With the initial outlay of these, then the insurance, the maintenance, the logistics of transporting them around etc my man maths is struggling to establish how this turns a profit. Unless they charge like 10k for renting but then whose paying that much to rent them?
Anyone in the business or in the know who can shed some information?
Think of how much is made on drug deals in the UK every year, there are only so many burger/pizza shops you can open, these rental businesses are just another way of disposing of the cash in the hope that some of it comes out clean.
Every dealer dreams of going straight at some point.
Every dealer dreams of going straight at some point.
The business model is for the cars to be bought on finance over 4 or 5 years. They make no money in that time, but the rental income should cover the finance payments, insurance etc, so they break even, or maybe run at a small manageable loss. Then the car is sold once the finance is cleared and that's your profit.
Many heavy plant hire firms run on the same business model.
It's much like running a hotel, occupancy is key. You need to keep the asset out on hire as much as possible. As they say in the trade, if you can see it, it's losing you money.
The biggest renters are accident management firms and insurers, for customers who own similar cars that are off the road following a non fault accident where the tp has accepted liability.
Many heavy plant hire firms run on the same business model.
It's much like running a hotel, occupancy is key. You need to keep the asset out on hire as much as possible. As they say in the trade, if you can see it, it's losing you money.
The biggest renters are accident management firms and insurers, for customers who own similar cars that are off the road following a non fault accident where the tp has accepted liability.
TwigtheWonderkid said:
The business model is for the cars to be bought on finance over 4 or 5 years. They make no money in that time, but the rental income should cover the finance payments, insurance etc, so they break even, or maybe run at a small manageable loss. Then the car is sold once the finance is cleared and that's your profit.
Many heavy plant hire firms run on the same business model.
It's much like running a hotel, occupancy is key. You need to keep the asset out on hire as much as possible. As they say in the trade, if you can see it, it's losing you money.
The biggest renters are accident management firms and insurers, for customers who own similar cars that are off the road following a non fault accident where the tp has accepted liability.
Its the same principle with any asset rental business, doesn't matter what you are rentingMany heavy plant hire firms run on the same business model.
It's much like running a hotel, occupancy is key. You need to keep the asset out on hire as much as possible. As they say in the trade, if you can see it, it's losing you money.
The biggest renters are accident management firms and insurers, for customers who own similar cars that are off the road following a non fault accident where the tp has accepted liability.
Buy it, rent it out, sell it when it appropriate to do so. Profit is crystallised when you sell the thing. Rinse & repeat (preferably as fast as possible!)
rich12 said:
The one with the LaFerrari etc either doesn't actually have one or it's a private owners car. Either way, it will never be on self drive. There isn't a single insurance company that would do a self drive policy for a £2m+ car.
Not so.
These are two very different businesses.
Horsepower is owned by Paul Bailey a well know car collector and I believe the UK's first owner of the HyperCar "holy trinity" of LaF, P1 and 918. I think he made his money from selling a telco or call centre business of some sort. He's a regular at events like VMax and may even be/have been a PHer.
The other is owned by a guy whose son is the self proclaimed "Lord" Aleem who is popular with the youth of instagram. I don't know how he made his money but he has two public record criminal convictions, one relating to money laundering and the other for some form of peripheral involvement in a murder ,
RSK21 said:
Not so.
These are two very different businesses.
Horsepower is owned by Paul Bailey a well know car collector and I believe the UK's first owner of the HyperCar "holy trinity" of LaF, P1 and 918. I think he made his money from selling a telco or call centre business of some sort. He's a regular at events like VMax and may even be/have been a PHer.
The other is owned by a guy whose son is the self proclaimed "Lord" Aleem who is popular with the youth of instagram. I don't know how he made his money but he has two public record criminal convictions, one relating to money laundering and the other for some form of peripheral involvement in a murder ,
I didn't click with the 'horsepowerrentals' part as I know it as another name but still..
Wombat3 said:
Its the same principle with any asset rental business, doesn't matter what you are renting
I'd assume this works with any asset that needs one or more paid customers using it - e.g. if you can sleep in your rental house, it's costing your money, if your commercial aeroplane is on the ground it's losing money, if your cars don't have a sold sticker on them then they're a loss etc etc.It's not that I see exotic cars in the same way as aeroplanes, but if someone once thought "f
k it, I'm going to buy a 747 and rent it out" and there's now a large lessors market - then there must be some form of legitimate business model for exotic cars that makes sense. I've watched a couple of the Super Speeders video series and Rob Ferretti now works for, or runs, an exotic rental business. He specialises in exotic cars in Las Vegas or for Gumball runs etc, where the market is healthy. I can't see it working in the UK (the billionaires tend to bring their cars here and I can't see a 488 GTB cruising down Brighton high street), but I'm sure there are opportunities available for people cleverer and ballsier than I.Supercar rental is clearly a murky industry in the UK.
High end = legit brands in rich locations for self-drive or chauffered (e.g. Hertz Supercar at Heathrow Airport).
Low end = lockups behind big gates in poor cities for self-drive (e.g. Birmingham, Bradford, etc.).
The industry euphemism for rental firms or cardealers who suddenly pop up with £1m of stock to rent or buy is "they found a sugardaddy"...
High end = legit brands in rich locations for self-drive or chauffered (e.g. Hertz Supercar at Heathrow Airport).
Low end = lockups behind big gates in poor cities for self-drive (e.g. Birmingham, Bradford, etc.).
The industry euphemism for rental firms or cardealers who suddenly pop up with £1m of stock to rent or buy is "they found a sugardaddy"...
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